Ruby Mills – Multibagger Analysis

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CMP: 303

Warren Buffett Checklist

History of Consistently Increasing Sales, Earnings & Cash Flow Yes. But not steady.  Should be a 2 year hold multibagger. image
Durable Competitive Advantage Moderate.  Cotton Business prospects are dull in our view. image
Future Growth Drivers For next 2 years it should be good. image
Conservative Debt (long term debt < 3 Net Profit) Not. image
Debt Equity Ratio, Current Ratio High Debt.  CR good. image
Return on Equity must be Above Average 17%. image
Low CAPEX required to maintain current operations Good. image
Management is holding / buying the stock 75% good. image
Price is Under Valued (< intrinsic value) Yes. image
Stock Price is consolidating (now) Yes. image
Stock Price is growing in past years along with EPS growth Not. image

Additional Futurecaps Checklist

Consolidated PE, PB Ratio PE 4, PB 0.9 image
Cash Flow Positive, Net Profit % greater than 8% Yes. image
Paying Dividends, Tax Yes image
EPS Growth Rate 30% in past & trailing. image
Jump in Trailing Results Yes image
Quarterly Results Growing Yes image
Expected Gain in 5 Years For 5 years we cannot comment as the growth is not steady.  For 2 years it should give 2-4X returns. image
Price Movement Graph, 52 Week High & Low Not Bad. image
Volume Analysis Low Volume which is Good. image
Power of Brand Not impressive brand. image
Corporate Governance, Reputation of Leaders Okay. image
Fraud reported Not in current search. image


Even though there is trailing, quarterly EPS jumps, the company growth is not steady, high debt & so on.   Hence we are not confident to declare it as multibagger.


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